Whither Tax Cut 2.0. Ways and Means Committee Chair Kevin Brady says the House GOP leadership will roll out a draft of what it calls Tax Reform 2.0 sometime next week, and that the committee will mark up the bill up soon after. However, Bloomberg reports that Republicans may be unable to advance legislation on the floor, since some House GOP members need to avoid a tough vote before mid-terms. Those House members are from high-tax states like New York, New Jersey and California—where taxpayers are hard hit by the Tax Cuts and Jobs Act’s $10,000 cap on state and local tax (SALT) deductions. Those voters want the SALT cap repealed, and the leadership’s tax bill apparently won’t do that.
Don’t look now, but states are already making online sellers collect sales taxes. TPC’s Howard Gleckman discusses the Tax Foundation’s finding that seven states already have imposed new rules on out-of-state online and catalogue sellers, and 10 will start on October 1. Two others will require collections or reporting later this year, and four will do so starting on January 1, 2019. States not only are beginning to collect the tax, they even are deciding how to spend the money—mostly by reducing sales or other tax rates. Says Gleckman: “Note to Congress: About that Internet sales tax thing, stand down. You are irrelevant.”
Does a gas tax have nowhere to go but up? New Jersey will raise gasoline taxes for the second time in two years. Governor Phil Murphy will announce a 4.3 cent per gallon hike in the motor fuel tax to 41.4 cents. Governor Chris Christie had signed a 23 cent-per-gallon increase in 2016. An industry expert explained that higher gas prices have depressed consumption, forcing the state to raise the tax. Consumption levels are returning to pre-2016 norms, though, and if they remain stable so may the gas tax.
The EU expects a deal on a digital tax by the end of the year. Reuters reports that this week, European Union finance ministers will review plans to impose a tax on companies’ digital sales by the end of the year. EU governments agree that taxes on digital services should go up, but they still need to agree on a process. Do they choose a quick solution for larger member nations or seek a global reform? Stay tuned.
Argentina to tax grain exports… President Mauricio Macri wants a deal with the International Monetary Fund that would hasten a $50 billion loan program. The government would impose an export tax of 4 pesos per dollar on agricultural exports and 3 pesos per dollar on other exports.
Save September 20 for a TPC event on the costs and benefits of tax regulations. Recently, the Treasury Department agreed to let the Office of Management and Budget (OMB) review some tax regulations before they are released. OMB’s Office of Information and Regulatory Affairs routinely does this for other agency’s regulations, but this is new for taxes. The agreement requires Treasury to prepare a cost-benefit analysis of rules with an annual nonrevenue effect on the economy of $100 million or more. A panel will discuss how Treasury should do this analysis and its implications. The TPC event takes place Thursday September 20 from 12:30 pm to 2:30 pm. You can register here.
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